That would be due to that the fact that the inspections were to have been assumed to be passed during the work. The main focus of the case is whether or not the Estelle’s made their complaints known throughout the process. If the complaints were made known and Allen then decided to ignore the complaints and go about his own building plans then he could be held liable for this tort. However, if Allen was completed the work under the assumption that he had been passing the periodic inspections without any complaints then his corporation should not be liable because their work was assumed to be correct and acceptable until the end. “A corporation is a creature of statute, an artificial “person.” Most states follow the Model Business Corporation Act (MBCA) or the RMBCA that are model corporation laws.” Corporation is owned by the shareholders and managed by a board of directors.
The Case of Business Law-Molly Case Tort law: Part 1 : We will begin with the liability of what Air transport Limited should hold. Firstly, the company would be accused of deceiving the customer. A tort arises when a party suffers damages by acting upon a false representation made by a party with the intention of deceiving the other. The owner lied intentionally to Molly that they had won a lot of awards for the quality of their delivery service, which he did not. Afterwards, Molly signed the contract and claimed very clearly about the the condition of the equipment and warned the Air transport Limited to protect it as careful as they can.
When revenue is less than expenses, there is a problem. Identifying the overages in expenses is crucial because these costs have a negative impact on the performance indicators profit margin and return on equity. This is what the CFO, Sullivan, was trying to avoid. The purchase of the line leases was a bad business decision that caused a major problem for the company and rather than deal with the consequences of the bad business decisions, Sullivan and others tried to hide the problem. The internal controls monitoring provided by Ms. Cooper and Mr. Morse uncovered the fraudulent transactions meant to hide the losses incurred when the telecommunications business fell off.
This would be very difficult to keep unbiased. b. Executive search services: One threat associated with this service is that if they help find potential executives for a company that they audit, they might overlook some problems that those executives could be involved in. c. Internal audit services: One threat associated with this service is that it would be too tempting to falsify information if you are only accountable with yourself. An outside auditor is ALWAYS necessary.
As the CEO of the company, Ebbers should play an important role in ensuring the company conducts business in accordance with the law and is on the right track. However, in the case of WorldCom, person who involved in fraud were the ones from the top management. When the top management has involved in fraud, they will use their power to cover offenses committed by them. Although employees of WorldCom know the fraud made by the top management, they have no right to object the top management decision as WorldCom implement a systemic attitude conveyed from the top down which employees must simply do what they were told and should not question their superior. They are afraid if there are any inevitable consequences when they are doing so.
Ethical and unethical aspects of the accounting activities Within the WorldCom case, it became evident that there were multiple unethical actions and decisions made by many individuals. The unethical actions began with the upper management of WorldCom when they falsie booked line rental expenses. The unethical actions continued to the accounting department when they recorded inaccurate entries without any reason or backup. The last unethical aspect occurred when Scott Sullivan and management attempted to cover up the falsified accounts while discouraging Cynthia Cooper’s investigation. The ethical aspect came from Cynthia Cooper and her team.
After listening to him his decision got bias. But in my opinion an employee should immediately report and error when it is discovered. All employees, especially employees who are burdened with the task of making projections which may impact the future of the company must act with integrity. Small-business investors and leaders consistently rely on the ethical collection and delivery of financial information. “According to Mintz, “Integrity is a fundamental trait of character that enables a CPA to withstand client and competitive pressures that might otherwise lead to the subordination of judgment.” The priority must be based on the professional responsibilities first rather than looking at the personal interest first.
Also, in Auditing Standard No.14 of PCAOB, it says the communication just gives the management an opportunity to correct misstatements. However, auditors should be more suspicious of these uncorrected misstatements, because there may be a sign of fraud. Thus, PCAOB requires auditors to understand why their clients refuse to make corrections, and evaluate the effect of the uncorrected misstatements, both individually and in combination with relevant accounts. 2. Should auditors take explicit measures to prevent their clients from discovering or becoming aware of the materiality thresholds used on individual audit engagements?
The stress of the audit partner is tremendous and choosing that profession is one that I would prefer not to undertake. The anxiety and pressure to certify that a company’s financial records are in good standing can be daunting. 3.) Independent auditors are sometimes perceived as the “necessary evil” by corporate executives because of the possibility of exposing corruption. To change this point of view an auditor can try to explain their intent to educate and improve the company’s policies, which can in turn lower costs.
MEMO TO: Leon Lassiter FROM: Elbay Aliyev SUBJECT: Midsouth Chamber of Commerce (B): Cleaning Up an Information Systems Debacle One of the first mistakes on behalf of MSCC was the fact that nothing was learned from past mistakes and the company relied on DMA too much. Even though any company can go through financial difficulties, much larger organizations could have a big capability of handling such difficulties and provide long-term support of a product for their clients. Another major source of the problems within the MSCC has come from negligent decision making of Gramen. The company has made the decision to move on from UNITRAK once Gramen was hired to replace Kovecki. The reason why Gramen was not a good candidate for a position is that he was extremely familiar with HP system, whereas the currently operating systems have been running on IBM AS/400.